Asahi Group Holdings, Ltd. FY2018 H1 Consolidated Financial Results (IFRS) NOTE: All information has been prepared in accordance with International Financial Reporting Standards (IFRS). Amounts shown in this accounting report and in the attached materials have been rounded down to omit fractions less than one million yen. This document is a partial English translation of the Japanese Financial Statement which was filed at Stock Exchanges in Japan on August 2, 2018. This translation was made for information only. The Company gives no warranty with respect to its correctness. Summary Report of Financial Results August 2, 2018 (Fiscal 2018 H1) Asahi Group Holdings, Ltd. Code number: 2502 Shares Listed: First Section of each of Tokyo Stock Exchanges Head Office: Tokyo Contact: Takayuki Tanaka, General Manager, Public Relations Section Tel: + 81 3 5608 5126 (http://www.asahigroupholdings.com/en/) US GAAP: Not applicable
1. Overview of performance (From January 1, 2018 to June 30, 2018) (figures are rounded down to the million) (1) Business performance (percentage figures represent the change form the previous year) Revenue Core Operating Profit Operating Profit Profit for the period (%) (%) (%) (%) Fiscal 2018 ended June 30, 2018 1,005,064 7.2 88,205 23.7 87,909 30.2 60,233 48.2 Fiscal 2017 ended June 30, 2017 937,375 20.4 71,314 30.7 67,516 27.9 40,656 34.0 Fiscal 2018 ended June 30, 2018 Fiscal 2017 ended June 30, 2017 Proft attributable to Total comprehensive income (%) (%) 60,378 48.3 (15,176) 40,723 32.4 119,851 Basic earnings Diluted earnings per share per share (yen) (yen) 131.80 131.80 88.89 88.89 (Reference) Profit before tax Fiscal 2018 H1 85,275 Millions of yen (41.0%) Fiscal 2017 H1 60,479 Millions of yen (26.9%) *Core operating profit is the reference index for normalized business performance. Core operating profit = Revenue (COGS + general administrative cost) *Core operating profit is not the index defined in IFRS. We think this index is useful for financial statements users so that we disclose it spontaneously. *Figures of Fiscal 2017 ended June 30, 2017 (culmative) are adjusted retroactively due to the confirmation of the tentative accounting process for business combination on March 2 (2) Financial Condition Total assets Total Equity Equity attributable to Equity ratio attributable to (%) Fiscal 2018 ended June 30, 2018 3,087,089 1,112,136 1,108,868 35.9 Fiscal 2017 ended December 31, 2017 3,346,822 1,152,748 1,145,135 34.2 2. Dividends Cash dividend per share Q1 Q2 Q3 Yearend Total annual Fiscal 2017 ended December 31, 2017 Fiscal 2018 ended June 30, 2018 Fiscal 2018 ending December 31, 2018 (forecast) (yen) (yen) (yen) (yen) (yen) 30.00 45.00 75.00 45.00 45.00 90.00 Note: Changes to the latest dividend forecast announced: No 3. Forecast for Fiscal 2018 (January 1, 2018 to December 31, 2018) Revenue Core Operating Profit Operating Profit Profit (%) (%) (%) (%) Fiscal 2018 ending December 31, 2018 2,140,000 2.6 220,000 12.0 204,000 11.4 142,300 2.5 Fiscal 2018 ending December 31, 2018 Proft attributable to (%) 142,000 0.7 Basic earnings per share (yen) 309.98 Note: Changes to the latest consolidated results forecast announced: Yes (Reference) Profit before tax Fiscal 2018 foreca 203,000 Millions of yen (3.1%) 1
Notes (1) Changes in status of material during the period (changes in specified due to changes in the scope of consolidation): No New: company ( ), Excluded: company ( ) (2) Changes in accounting policies, or chages in accounting estimates (1) Changes in accounting policies required by IFRS: Yes (2) Changes in accounting policies other than item (1) above: No (3) Changes in accouting estimates: No (3) Number of shares (common stock): (1) Issued share at periodend (including treasury shares): Year ended June 30, 2018 Year ended December 31, 2017 (2) Treasury shares at periodend: Year ended June 30, 2018 Year ended December 31, 2017 (3) Average number of outstanding shares during the period: Year ended June 30, 2018 Year ended June 30, 2017 483,585,862 shares 483,585,862 shares 25,504,143 shares 25,461,769 shares 458,095,876 shares 458,130,380 shares (Note) Numbers of treasury shares which are deducted for the calculation of Treasury shares at periodend and Average number of outstanding shares during the priod include the common shares of the Company held by Japan Trustee Services Bank, Ltd. as the trust assets of a performancelinked stock compensation plan for Directors. (Year ended June 30, 2018 : 38,700 shares) * This Consolidated Financial Results is not subject to the review procedures * Forwardlooking statements and other special instructions The forwardlooking statements that reflect Asahi s forecasts for consolidated and unconsolidated results in this document are based on the information available at the time of the release of these materials and reasonable assumpitons made by Asahi. Certain risks and uncertainiteis could cause the results of Asahi to differ materially from any projections presented herein. 2
4. Consolidated Financial Statements (Unaudited) (1) Consolidated Statement of Financial Position (As of December 31, 2017 and June 30, 2018) (Assets) Current assets As of As of December 31, 2017 June 30, 2018 Cash and cash equivalents 58,054 62,497 Trade and other receivables 433,436 406,083 Inventories 155,938 170,359 Income tax receivables 12,354 5,699 Other financial assets 6,896 7,539 Other current assets 27,104 32,861 Subtotal 693,785 685,040 Assets held for sale 118,641 Total current assets 812,426 685,040 Noncurrent assets Property, plant and equipment 717,914 683,735 Goodwill and intangible assets 1,538,679 1,444,326 Investments accounted for using equity method 4,846 8,063 Other financial assets 219,142 214,383 Deferred tax assets 11,388 9,564 Net defined benefit assets 26,055 25,321 Other noncurrent assets 16,368 16,652 Total noncurrent assets 2,534,396 2,402,048 Total assets 3,346,822 3,087,089 (Liabilities and Equity) Liabilities Current liabilities Trade and other payables 433,582 419,602 Bonds and borrowings 359,722 259,915 Income tax payables 51,856 33,916 Allowance 15,451 14,394 Other financial liabilities 29,224 28,595 Other current liabilities 144,355 139,231 Subtotal 1,034,191 895,655 Liabilities directly related to assets held for sale 17,965 Total current liabilities 1,052,157 895,655 Noncurrent liabilities Bonds and borrowings 902,203 848,257 Net defined benefit liabilities 25,488 25,345 Deferred tax liabilities 156,780 142,621 Other financial liabilities 52,997 59,476 Other noncurrent liabilities 4,446 3,596 Total noncurrent liabilities 1,141,917 1,079,296 Total liabilities 2,194,074 1,974,952 Equity Issued capital 182,531 182,531 Share premium 119,051 119,103 Retained earnings 713,146 753,905 Treasury shares (76,747) (76,987) Other components of equity 210,592 130,315 Other components of equity related to disposal group held for sale (3,440) Total equity attributalble to 1,145,135 1,108,868 Noncontrolling interests 7,612 3,268 Total equity 1,152,748 1,112,136 Total liabilities and equity 3,346,822 3,087,089 3
(2) Consolidated Statement of Profit or Loss and Comprehensive Income (From January 1 to June 30, 2017 and 2018) <Consolidated Income Statements> Revenue 937,375 1,005,064 Cost of sales (587,114) (618,019) Gross Profit 350,260 387,044 Selling, general and administrative expenses (278,946) (298,839) Other operating income 915 2,710 Other operating expense (4,712) (3,005) Operating Profit 67,516 87,909 Finance income 1,720 4,244 Finance costs (5,007) (6,374) Share of profit (loss) of entities accounted for using equity method (3,749) 397 Loss on sales of investments accounted for using equity method (901) Profit before tax 60,479 85,275 Income tax expense (19,822) (25,042) Profit for the period 40,656 60,233 Profit attributable to: Previous year Current year (From January 1 to June 30) (From January 1 to June 30) Owners of parent 40,723 60,378 Noncontrolling interests (66) (145) Total 40,656 60,233 Basic earnings per share (JPY) 88.89 131.80 Diluted earnings per share (JPY) 88.89 131.80 4
<Consolidated Statement of Comprehensive Income> Profit for the period 40,656 60,233 Items that will not be reclassified to profit or loss Changes in fair value of financial instruments measured at fair value through other comprehensive income 3,708 3,974 Remeasurements of defined benefit plans 18 Items that might be reclassified to profit or loss Cash flow hedges (12,254) 1,201 Hedging cost (409) Translation difference on foreign operations 83,221 (82,732) Share of other comprehensive income of entities accounted for using equity method Previous year Current year (From January 1 to June 30) (From January 1 to June 30) 4,500 2,556 Total other conprehensive income 79,194 (75,409) Total conprehensive income 119,851 (15,176) Total comprehensive income attributable to: Owners of parent 120,139 (15,733) Noncontrolling interests (288) 557 5
(3) Consolidated Statement of Changes in Equity Fiscal 2017 (January 1 to June 30, 2017) Equity attributable to Other components of equity Issued capital Share premium Retained earnings Treasury shares Changes in fair value of financial instruments measured at fair value through OCI Remeasurements of defined benefit plans Cash flow hedges Balance as of January 1, 2017 182,531 118,668 589,935 (76,709) 51,881 (219) Comprehensive income Profit for the period 40,723 3,708 18 (12,223) Total comprehensive income 40,723 3,708 18 (12,223) Transfer to nonfinancial assets 12,054 Transactions with owners Dividends (12,827) Purchase of treasury shares (16) Disposal of treasury shares 0 0 Changes through business combinations Sharebased payment transaction Transfer from other components of equity to retained earnings Other increase (decrease) Total contributions by owners and distribution to owners Acquisition of noncontrolling interests without change in control Total changes in ownership interests in Total transactions with owners Balance as of June 30, 2017 24 2,463 24 2 (10,364) (16) 2 27 (10,364) (16) 182,531 118,695 620,295 (76,725) (2,444) (18) (2,444) (18) (2,444) (18) 53,144 (388) Equity attributable to Hedging cost Other components of equity Translation difference on foreign operations Total other components of equity Other components of equity related to disposal group held for sale Total equity attributable to Noncontrolling interests Total equity Balance as of January 1, 2017 (29,734) 21,927 836,354 9,750 846,105 Comprehensive income Profit for the period 40,723 (66) 40,656 87,912 79,416 79,416 (221) 79,194 Total comprehensive income 87,912 79,416 120,139 (288) 119,851 Transfer to nonfinancial assets 12,054 12,054 12,054 Transactions with owners Dividends (12,827) (405) (13,232) Purchase of treasury shares (16) (16) Disposal of treasury shares 0 0 Changes through business combinations 300 300 Sharebased payment transaction Transfer from other components of equity to retained earnings Other increase (decrease) Total contributions by owners and distribution to owners Acquisition of noncontrolling interests without change in control Total changes in ownership interests in Total transactions with owners (2,463) (2,463) (2,463) Balance as of June30, 2017 58,178 110,934 24 24 266 266 (12,819) 161 (12,658) 2 (42) (39) 2 (42) (39) (12,816) 118 (12,698) 955,731 9,581 965,312 6
(3) Consolidated Statement of Changes in Equity Fiscal 2018 (January 1 to June 30, 2018) Equity attributable to Profit for the period Transactions with owners Other components of equity Cash flow hedges Balance as of January 1, 2018 182,531 119,051 713,146 (76,747) 71,386 (624) Comprehensive income Issued capital Share premium Retained earnings 60,378 Treasury shares Changes in fair value of financial instruments measured at fair value through OCI Total comprehensive income 60,378 3,974 Transfer to nonfinancial assets Remeasurements of defined benefit plans 3,974 1,071 1,071 271 Dividends Purchase of treasury shares Disposal of treasury shares (20,615) (240) 0 0 Changes through business combinations Changes through sales of consolidated Changes in scope of consolidation Sharebased payment transaction 51 Transfer from other components of equity to retained earnings Other increase (decrease) Total contributions by owners and distribution to owners Acquisition of noncontrolling interests without change in control Total changes in ownership interests in 995 (995) 51 (19,619) (240) (995) Total transactions with owners 51 (19,619) (240) (995) Balance as of June 30, 2018 182,531 119,103 753,905 (76,987) 74,365 717 Profit for the period Transactions with owners Hedging cost Other components of equity Translation difference on foreign operations Equity attributable to Total other components of equity Other components of equity related to disposal group held for sale Total equity attributable to Balance as of January 1, 2018 (1,179) 141,010 210,592 (3,440) 1,145,135 Comprehensive income Noncontrolling interests Total equity 7,612 1,152,748 60,378 (145) 60,233 (409) (84,188) (79,552) 3,440 (76,112) 702 Total comprehensive income (409) (84,188) (79,552) 3,440 (15,733) 557 (15,176) Transfer to nonfinancial assets 271 271 271 (75,409) Dividends Purchase of treasury shares Disposal of treasury shares (20,615) (463) (21,079) (240) (240) 0 0 Changes through business combinations Changes through sales of consolidated Changes in scope of consolidation (1,711) (1,711) (2,703) (2,703) Sharebased payment transaction 51 51 Transfer from other components of equity to retained earnings (995) Other increase (decrease) Total contributions by owners and distribution to owners Acquisition of noncontrolling interests without change in control Total changes in ownership interests in (22) (22) (995) (20,804) Total transactions with owners (995) (20,804) (4,901) (25,706) Balance as of June 30, 2018 (1,589) 56,821 130,315 1,108,868 (4,901) (25,706) 3,268 1,112,136 7
(4) Notes to the Condensed Consolidated Financial Statements (Changes in Accounting Policies) Asahi Group has adopted IFRS 15 "Revenue from Contracts with Customers" and "Clarifications to IFRS 15" since FY2018 Q1. We applied the method to recognize the cumulative impacts incurred by the application of this standard on the application start date, which is permitted as a provisional measure. We recognized the revenue based on 5 steps approach as below in accordance with IFRS 15. STEP1 Identify the contract(s) with a customer STEP2 Identify the separate performance obligations (PO) in the contract STEP3 Determine the transaction price STEP4 Allocate the transaction price to the separate POs STEP5 Recognize revenue when the entity satisfies a PO The impact compared with the previous accounting standard is minor for the condensed consolidated financial stetements. (Notes Regarding Going Concern Assumptions) None 8